The Ultimate Guide to Tax Lien Investing

Aviva (00:00)
This week's listener of the week is Sam Ropart. Sam, thank you so much for leaving us a five-star review. And for those of you listening, if you leave us a five-star review below, you might be next week's listener of the week, week. This week on Commercial Real Estate Secrets, we have Angela Duncan. Angela is the founder of Empower Her Money.

Angela, thank you so much for being on the show today.

Angela Duncan - Empower HER Money (00:30)
Thank you for having me.

Aviva (00:33)
Um, it's a pleasure. So Angela, tell us about yourself, who you are, what you do, and why we are here together today on Commercial Real Estate Secrets.

Angela Duncan - Empower HER Money (00:43)
Yeah, so I mean, I start from very young. I am a survivor of poverty. Here in the US, poverty means I grew up on section eight housing and welfare. I've lived in cars and parks and motels and other people's houses all before the age of 15. And I always thought that if we had this thing called money that maybe I wouldn't have had to live that lifestyle. So that kind of started me on my pursuit of learning more about money. And then I came across real estate.

Aviva (01:13)
So how old were you when you were introduced to real estate?

Angela Duncan - Empower HER Money (01:17)
I bought my first house about 20 years ago. I was pregnant with my daughter and I just wanted a home. Now it was not my best investment decision but I wanted to buy a house. So I was 24, 23, somewhere around there.

Aviva (01:32)
Wow. And so you make your first real estate investment and you're just now starting to learn about real estate. What happens thereafter?

Angela Duncan - Empower HER Money (01:44)
Yeah, so first no one really taught me about real estate. The house that we lived in, I could not go out at nighttime by myself. Domino's Pizza would not deliver to our house. So you can kind of guess what kind of neighborhood it was. But I grew up in that type of environment and it just seemed normal to me. So while it wasn't my best decision, it at least got me started on real estate. And so I started to learn about real estate, investing, figuring out rental properties. And we went through a time period where

You didn't have to tell people really what you made. You just kind of had to, you didn't have to show it, right? So we could buy rental properties, rent them out, and I didn't really qualify for the loans. So that obviously was a housing market crash, but I did learn a lot from that experience.

Aviva (02:32)
So what were you doing at this time job wise to start funding your beginning of real estate investing endeavors?

Angela Duncan - Empower HER Money (02:43)
Yeah, I thought I wanted to be a financial advisor and work on Wall Street and then kind of do real estate on the side. I learned that I wasn't very good at that. You know, there's a lot you can't control with the stock market, whereas you can control a lot more on the real estate side. And I wanted to help people and make money for them. And I wasn't doing a very good job as a financial advisor. So once I got into the rental side of stuff, switched gears, got my real estate license, and then started on that path of being an actual real estate agent.

Aviva (03:13)
Are, do you still hold a real estate license to this day?

Angela Duncan - Empower HER Money (03:18)
I don't transact, but I still hold the license for sure. I wanna stay on top of all of the laws, everything that's going on in real estate. And the best way to do that is to have a license and do that continuing education that's required of us. But then I get all of these emails from the brokers and you know, NAR and FAR and lots of other abbreviations that maybe some people are familiar with.

Aviva (03:34)
I think more and more people are getting familiar with Gnar, especially as of recent. So tell us about Empower Her Money, what that is and what your mission is.

Angela Duncan - Empower HER Money (03:43)
Yes.

Yes, so I sold my last company, which was a property and casualty insurance company a little over a year ago. I built an existing insurance company. I acquired several, I grew really fast, but what I learned it wasn't being the best leader for that company and I wasn't hiring the right people for the right position, which is so important as an entrepreneur. So I ended up selling that company because I didn't like coming into my office every day and that's a terrible thing to do.

So then I took some time off, got a little bored and thought, I know a lot about real estate. I know a lot about business. I know a lot about money. How do I teach people about this? And that's when I launched Empower Her Money. I did a podcast, which I still have, wrote a book and I did, started doing speaking events because how do you reach people and teach about real estate? Well, speaking is a great way to do it when you have a good message, for sure.

Aviva (04:42)
Wow, wow. So through Empower Her Money, your mission is obviously to empower women how to build financial stability through real estate, correct? And what avenues through real estate do you touch on in Empower Her Money?

Angela Duncan - Empower HER Money (05:05)
Correct.

Yeah, so when I teach, I've done a lot of things. So I've had the single family and rented them. I've done section eight housing and rented them. I've done flip properties. I've done syndications. That's when a group of people come together and buy apartment complex, storage units, or RV parks. Today, my focus myself with my clients is on tax lien investing, both residential and commercial, but I can teach all avenues of it. So what I encourage people is to pick a lane.

and study that and become a master at that first, which is what I did. And then I started crossing over to different avenues within the real estate area.

Aviva (05:42)
It's so fun because real estate, there's no way to learn all of that stuff unless you just do it. And, um, it's fun to talk and, and the only way to do it is to jump in with two feet and literally make a splash. So I'm jazzed up. Can you explain tax lien investing as if we were in the third grade?

Angela Duncan - Empower HER Money (05:54)
Yes.

Yes. So there's two types really in the U S there's tax liens and there's tax deeds depends on your state. I'm going to use Florida as an example, because I live here. Right? So if you own a property, whether it's a home or a commercial property, and you don't pay your property taxes, a lien gets placed on your property. Why? Because, well, the government needs that money to run their everyday budget from.

you know, police officers and firefighters and teachers, all of that money that you pay for property taxes goes to the government for their budget. And when you don't pay, they put a lien on it and investors like myself can come in and buy that lien from the government so that they can run their budgets, but then they're guaranteeing an interest rate for me as that investor. So I focus on the states that I understand. And if anyone wants to get into tax liens,

Learn your backyard first, because you need to know the difference in laws, especially where you live.

Aviva (07:06)
So when you're tax lien investing, you purchase the lien. Can you explain to me the timing and how that all works? Because I know there's an element of patience that you have to deploy.

Angela Duncan - Empower HER Money (07:27)
Yes. Yeah. So again, I'm going to stick with Florida because it's easy for me to explain. I know many of the states, but I'm just going to stick with Florida. So Florida, um, if you don't pay your property taxes, the next year that lien goes up for sale. Now I'm in Miami County. I can go online to the auction that's held every year and I bid for that lien and then I purchased that. So property is already one year in, you know, past due.

Now from that point, one of two things could happen. I can wait two years and the property owner doesn't pay their taxes back, I'm gonna foreclose on them and take the property from them or that property owner will eventually pay their taxes. I get my money back and I get that interest. So it depends on what happens with that actual property owner to decide what kind of my next step is gonna be.

Aviva (08:15)
Wow. Do you find that like what percent of owners do you find actually foreclose verse find the money and pay off the lien or the taxes excuse me.

Angela Duncan - Empower HER Money (08:33)
Yeah, so if there's, yeah, most homeowners pay off their property taxes. Usually like someone's lost a job, maybe they had an ailment and they have some additional medical bills or a death in the family. So they're behind for a reason. Most of the times the property owner's gonna catch it up. Now for me, I do want to foreclose because I make the most money doing the foreclosure and then taking the property and selling it.

but I can come to the homeowner and say, hey, what's going on in your life? Do you need to leave this property? Well, if you lose it, you lose all of the equity that you've paid for, right? So let's find out a way where I can give you money, I can still take that property and you can be on your way. So we do try to come in and help that homeowner to see if we can help them to their next part of their life, but homeowners have to understand that if you don't pay your property taxes,

and you lose that home to foreclosure, all of that equity, all of that worth, you lose completely. So try and figure out a way to either pay your taxes or work things out. Don't lose that property.

Aviva (09:38)
That's a fascinating strategy. And I just can't imagine not paying my property taxes. But I know people do. I.

Angela Duncan - Empower HER Money (09:55)
It happens all the time. Billions of dollars of foreclosures happen in this country every year. So I mean sometimes people might have a mortgage and they owe more than it's worth. I get certain situations but when there's equity in your home, sell the property. Even if it's just a quick sale, get some of it back. Don't lose the whole equity of your property.

Aviva (10:03)
Mm-hmm.

Sure. So, I'm curious how technology has changed with tax lien investing, I would say maybe even in the last five years, if you can speak on that.

Angela Duncan - Empower HER Money (10:30)
Yeah, a lot more of the auctions are online. It used to be that you would go to the courthouse, they would go through a list of, you know, we call them pin numbers, partial ID numbers, and you would bid on it. So you would have to have done all your research before the auction of the date, you know, and then you're kind of bidding like the old school with the, you know, like a little paddle, right? Now, mostly everything is online. So that's great for us investors because one, I can see the list before the auction date. So I'm gonna go and do my own research.

and then decide which ones I'm gonna bid on. Two, it just makes it easier. I can do it from my home. I don't have to necessarily go down and spend hours at a courthouse and then walk away with nothing, whereas I'm just gonna do my bids online. And if I don't get anything, great, I'll wait for the next round, but at least I'm sitting in the comfort of my home.

Aviva (11:12)
How do you mitigate your risk when doing these auctions?

Angela Duncan - Empower HER Money (11:24)
Yes, so you really have to do your research and understand what a tax lien is. A tax lien is a first lien, meaning it is in front of a mortgage. If you didn't pay the roofer and they put a lien, it's in front of that. So understanding the process. Two, I said start in your own backyard because I'm gonna drive by and make sure there's a house there. Make sure there's a building there because I don't wanna own dirt. That's not an investment for me. So I can't tell what's going on inside the house, but I at least have an idea that there's a house there, right?

It's also really important for you to have the right team, so an attorney to help you do a title search to see what else could be out there and making sure I have a good contractor because if I have to take the property, I may wanna fix it before I sell it. So I like being prepared and learning the process first, then start with some smaller liens, like smaller houses, because if you get stuck with a house at the end of the day, which can be a really good thing, you need to know.

Aviva (12:20)
Wow. So out of curiosity, when do you engage an attorney in this process? When is the attorney engaged to do their due diligence on the title?

Angela Duncan - Empower HER Money (12:22)
the process at that point until you can sell the home.

Yeah, you should be doing that before you bid on the lien. A lot of people kind of just risk it. I wanna know what else might be fighting me later on wanting to take this property. If there's a mortgage, they're gonna want the property obviously, cause they're owed a lot more money than I am. If there are issues like, you know, like you let your lawn grow too long and now the city has a lien on the property. I want to know all of those things, but.

it can be costly too. So you've got to figure out what kind of investor are you. Are you going to take the risk and bid on the lien and hope that the homeowner just pays you back? Or you're going to do your research upfront to make sure that if you have to foreclose, you already know what's going on with that property.

Aviva (13:17)
Wow, what are common misconceptions you find from the public or from even just anybody about tax lien investing?

Angela Duncan - Empower HER Money (13:35)
Yeah, so each state is so different and I think that's a misconception. You know, Florida, it's two years before I can foreclose other places like Arkansas, 60 days, you know, Illinois can pay up to 36% interest depending on how long you hold it. I think people think that across the US it's just one standard, but it's not. It's gonna vary by county and by state. So it's really important for you to understand where you're investing before you even start.

Aviva (13:59)
Wow, it's so interesting with real estate. It's like you said, the laws vary from state to state, but they really vary from county to county. And if you don't know what you're doing, which is why you say start in your own backyard, if you don't know what you're doing, ooh, you could lose your head and people do. And sometimes that can be a learning lesson, but generally we try to avoid that.

Angela Duncan - Empower HER Money (14:17)
Mm-hmm.

Aviva (14:30)
So.

Angela Duncan - Empower HER Money (14:36)
Yeah, I think I just got lucky. My first couple I bid online and nobody bid against me and I just happened to get it. And then two years later, a check shows up and I was like, I totally forgot about that investment. And then I went back and just really did research. And tax liens are not just for residential. They're also for commercial. Everybody pays property taxes. So you can be bidding on either residential or commercial. And again, make sure you're driving by that property because you know, if there's nothing there for you to...

Aviva (14:55)
Wow.

Wow. So how did you learn about tax liens when you were getting started?

Angela Duncan - Empower HER Money (15:05)
you know rent out then it might be harder for you to sell it once you foreclose.

reading books. There are lots of books out there on Tax Liens. If you're reading now, make sure your book is recent because like I said, the county, the city, the state laws change. And so that's where I started. Today you can find YouTube videos, you could find podcasts on them, find a mentor, you know, our company helps people invest, you know, there's lots of other companies like us out there.

So make sure you're getting your information before you start investing, because you essentially could lose every penny that you put in.

Aviva (15:44)
I think that's really valuable. Just do a lot of research because it sounds simple, but it's not. I think we're in a world where people want instant gratification, but the reality of success is that nothing is instant. Save yourself a lot of heartache and headache by

educating yourself properly on the front end. So with Empower Her Money, your mission is to teach women how to create generational wealth, correct?

Can you tell us a bit more about that? Why women and why generational wealth?

Angela Duncan - Empower HER Money (16:29)
Yes.

Yes, well, I mean, I grew up in poverty. So I wanted to break that cycle, make sure that I didn't grow up as an adult in poverty. I wanted to teach my daughter how not to be in poverty. Now, obviously it's up to her and what she does, but at least I'm giving her the tools, right? The tools that I didn't have as a kid. And the reason why I focus on women is because it hasn't been that long that women could do this on their own, right? It was in the 70s that we could get a credit card. It was in the 80s when we can get a small business loan.

Aviva (17:02)
Well.

Angela Duncan - Empower HER Money (17:07)
And I think a lot of that, like the psychology behind money, we're just a little further behind still. And that's okay, right? But there's information out there. And I do believe that we think differently when it comes to investing, we tend to be more conservative. We're very heart centered people. So we either don't charge enough or give away too much. So how do we kind of combat that? Still having our feminine side, but really making sure that we're taken care of. 50% of divorces in the US, that's how marriages are ending.

You need to know your money. You need to know how to take care of yourself, whether you're married or single. It's important for you to understand money. And real estate to me is one of the best ways to invest and actually create wealth for your family.

Aviva (17:45)
I could not agree more on every front. It does pain me the way the world has been set up to be less advantageous for women to create wealth. However, I think there's a lot of really positive change right now and really positive. My whole theory is that the internet has opened up the floodgates.

to level the playing field for anyone who was disadvantaged, be it somebody who was impoverished or women who historically were 2% of real estate investors. So, there is a lot, you know.

Angela Duncan - Empower HER Money (18:36)
Yeah, and that's the great thing about, yeah, tax lien investing is mostly, you know, online. And the only thing that the online cares about is what's the best number. It does not care if you're a man or woman. And so that makes it very even for us as far as like bidding, right, on the properties. So that's a great example of how you can invest in real estate no matter who you are.

Aviva (18:52)
Wow, that's cool. So a question I ask all of my guests before I'll let everybody know how to get ahold of you, follow you, find you, contact you, et cetera, is what is currently making you happy about what you do in real estate in your day to day?

Angela Duncan - Empower HER Money (19:21)
Yeah, so I set my own goals based upon what my clients are making and when I'm hitting that goal, then I truly feel like I'm making a difference. Like someone's listening to me, someone's taking action and now they're making money. So I love creating goals around my clients instead of me first. But I do still, you know, obviously invest myself and the education piece is continuing. I will be a student forever.

Aviva (19:41)
I love that. I love learning. I think in the sector of real estate, there's literally like you couldn't synthesize every situation that could come up or you real estate is an opportunity to consistently be learning and that is humbling. Specifically if you're a lifelong student because boy would it not be fun if you didn't have that outlook.

So Angela, where can our viewers find you online?

Angela Duncan - Empower HER Money (20:21)
Yeah, if you'd like to know more about what I teach, empowerhermoney, I am on podcasts, YouTube, TikTok, Instagram, all under the same name, empowerhermoney. So keep it the same across all platforms so you can find me easily. And I do respond to my own messages. So if you have a money question or a real estate question, send me a message and I will happily reply back.

Aviva (20:37)
Awesome. Angela, we really appreciate your time and your knowledge and your power. And for everybody listening, we'll see you next week.